IL Borrowing From Peter To Pay Paul

Mon, 02 Jun 2014 05:31:22 CDTBy: IPR

The budget passed by the Illinois General Assembly does not rely on extending the 20-11 income tax hike, as originally planned by Democratic leadership. Instead it's based on state government borrowing ... from itself. Instead of making the five percent income tax rate permanent or chopping away at government programs, lawmakers opted to fill a massive hole in state revenues by doing something called "interfund borrowing."
The funds are filled by specific fees, and are meant to be used for specific purposes. Borrowing from them is kind of like using a vacation fund to go grocery shopping. Republicans, like Senator Dale Righter of Mattoon, think this is a terrible idea.

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"I'm concerned about how you're raising the money for those funds and whether or not you're spending the money from those funds the way you told the taxpayers or the contributors to that fund that you would spend it."

But Senator Daniel Biss, a Democrat from Evanston, says without extending the income tax, this is a viable option.

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"Hey, let's be honest. We're passing a budget that delays some very important decisions. And in a situation like that, we need to give the governor the authority needed to manage his way through this situation."

Democrats say they're likely to revisit the income tax question after the November election.